Luxury brand
Luxury is a complex and multifaceted term that varies from traditional definitions which refer to “its connection with pleasure and satisfaction of individual feelings through objects or experiences that are more snobbery than ordinary” to new definitions that refer to “its relation to society and the level of culture and the civilization of those people” and is being discussed [41]. The growth of luxury relates to the societal trend that the “rich get richer, and the poor get poorer” [50]. Since the 1980s, the luxury market has grown at about ten percent per year, a much higher rate than the world economy [19]. According to Kapferer and Bastien [29], luxury brands are often influenced by the four following factors: (1) democracy, (2) increased purchasing power, (3) globalization and (4) communications.
Among several confusing definitions of the concept of “luxury,” the most well-known description was defined by Dubois et al. [11], and still, the debates on it continue. They characterized luxury by excellent quality, very high price, scarcity and uniqueness, aesthetics and polysensuality, ancestral heritage and personal history, and superfluousness. Other definitions are in ambiguity. For example, Jung Choo et al. [26] quoted that the term is often used to indicate products, services or brands of high price, excellent quality, aesthetic beauty, pleasure or exclusivity or rarity. However, the definitions of Dubois and others were investigated by various researchers from different points of view; as per Kapferer and Bastien [28], most researchers are all agreed that phenomenon of luxury could be analyzed in two respects: social and personal.
Dubois et al. [11] performed a comprehensive study on the perception of consumers on luxury consumption in twenty countries and found out six features of luxury, but it was found a little bit misleading; so, Heine and Phan [20] explained that luxury brands are regarded as images in the minds of customers that comprise associations about six major product-related characteristics (dimensions): rarity, excellent quality, aesthetics, symbolic meaning, high level of price, extraordinariness and overly necessary that can be considered as dimensions ranging from a minimum level that is also necessary for non-luxury brands to a maximum level that corresponds to the highest form of luxury [19].
Although some believe that luxury is to a great extent a highly subjective phenomenon [50], for identifying the frontier of luxury, Sudarsan [47] differentiates the brands according to Kotler’s marketing management in five levels along with an example: basic: Kia, utility: Dodge, quality: Infinity, premium: Mercedes and luxury: Rolls-Royce. Then, the degree of luxuriousness is determined by following separation and a representative brand: entry-level luxury brands: Hugo Boss, medium-level luxury brands: D&G, top-level luxury brands: Louis Vuitton and elite-level luxury brands: Puiforcat [19]. The last level provides distinctive social prestige to their customers [4].
Among controversial features, regarding the dimension (characteristic) of “aesthetics,” Dubois and others emphasize the polysensuality of luxury products as they “not only look beautiful but also are (and should be) pleasant to hear, smell, taste or touch” and therefore offer a “source of sensual pleasure” [19]. While Kapferer [27] mentioned that luxury products are held as artistic objects. Art is the aesthetic and social guarantor of luxury: truly a marriage of culture and luxury [25].
Where the distinction between luxury and non-luxury sometimes is blurred, a result of the temptation of luxury brands, the experiential dimension becomes an essential means of identifying true luxury. In this experience, the pleasure provided comes from the stimulation of the senses (smell, taste, sound, visual and touch) [3].
Regarding feature of “symbolic meaning,” as per Kapferer and Bastien [28], the DNA of a luxury product is the symbolic desire to belong to a superior class. Luxury brands must represent an emotional meaning for customers when purchasing them, in a way that they think they are buying a personal story from the past [4]. So, the dimension of a symbolic meaning with heritage and history makes the brand stand for “the best from the best for the best”; its charisma fills the room, and regardless of whether it is of a conspicuous or understated nature, deep inside, it is swollen with pride [19]; the high level of prestige and social status apart from any functional utility [24].
The last feature, “extraordinariness,” is the main factor differentiating the luxury from the needs. The luxury products do not aim to provide any rational and functional benefit by fulfilling a function; they rather help people realize their dreams by providing emotional and hedonic benefits [4].
All in all, luxury products that are more than necessary and ordinary obviously need to be scarce and cannot be owned by everyone, which is not possible as they are too expensive anyway [51]. Luxury is typically associated with rarity and needs high prices to be credible in terms of higher quality [30].
Marketing mix strategies to enter luxury markets
Historically, a luxury brand offered a unique store-level experience, and from a customer’s perspective, it often involved dressing up and going into a high-end boutique to consult with a salesperson about what to buy. In today’s marketplace, however, many luxury firms are attempting to engage luxury customer through the Internet [45]. The marketing of the luxury brands has to give a priority to their long-term strategy and their reputation; they should strictly follow their brand identity that makes them different from each other and from non-luxury brands [29]. In fact, rarity is the key to luxury growth [27].
Luxury marketing mix strategies that partly contradict with the common rules of non-luxury marketing, in order to enter the luxury market and to build a successful luxury brand and to make it remain as a luxury brand, one has to forget the traditional marketing rules. As Bastien and Kapferer [2], anti-laws of luxury brand marketing require an in depth treatment.
Generally, it could be explored through four rules or paradoxes: First the product that emphasizes on quality, packaging, innovation and creativity; second the price that refers to high superlative pricing policy to attract snob customers; third, the distribution policy where the balance between the increasing sales volumes and selective distribution should be maintained. As Fionda and Moore [15], the luxury-specific distribution includes the flagship store; at last, fourth: the communication policy that means controlling the frequency of the emergence of a luxury brand in order to make specific customers aware and prevent raising the public demands [19, 48].
One type of marketing communication mix is the use of celebrities or famous individuals and their endorsement in the promotion activities of public relation segment, of course with caution in the luxury strategy to build distinction, style and sustained appeal [2, 19]. In today’s technological world, it is essential to specialize in implementation of new marketing techniques for managing luxury brands.
With the exponential growth of social network sites and various social media, however, luxury brands face challenges in how to maintain brand integrity while harnessing the power of social network sites [1]. The tendency of a customer to stay in a relationship with a brand, beyond cause and effect, usually leads to individual’s loyalty to that company and brand, of course under the firm’s control which may enhance relationship equity that can be improved through a variety of social tools and to build the images that make customers identify that specialty from among others [32].
The intention to research online and purchase off-line (ROPO) is particularly relevant to luxury brands’ products given the high costs of purchasing and the high risks of counterfeit luxury brands online. ROPO in luxury brand consumption can be operationally defined as consumers’ behavioral intentions to visit a luxury brand’s online channels before making an off-line purchase. Social media can facilitate evaluation through user-generated contents and thus reduce uncertainty and improve efficiency of luxury consumers’ online searches [1].
Some previous researches on luxury brands
Luxury brands have received considerable research interest in marketing literature over the last two decades [44]. Following fast-growing attempts to explain various aspects of luxury brand marketing, Kapferer [27] attracted everyone’s attention to the growth of Asian luxury markets and defined virtual rarity tactics and also a luxury business model.
Among different studies, an article which conducted by Jung Choo et al. [26], proposed a framework which revealed that the related customer's values of high symbolic, economic and functional of a luxury fashion brand are important for developing a positive relationship with the brand.
Bastien and Kapferer [2] focused on clarifying the luxury product marketing strategies, describing the current situation of the luxury market and the threats and risks of luxury brand marketing.
Wiedmann and Hennigs [50] summarized the luxury marketing management in a handbook, focusing on different approaches to propose a comprehensive framework and then classifying several directions in luxury marketing research.
Freire [16] highlighted the importance of communication of luxury parent Houses on consumers through reinforcing their brand image and attracting more loyal consumers by specific advertisements. The artistic advertisements add the value to the luxury product and the luxury house.
Then, Kapferer and Laurent [30] tried to answer the question where each consumer perceives luxury begins, with consideration that the level varies across consumers and countries. They suggested the researches on luxury should be based on the consumer’s own personal definition of the price.
Another research, which has been done by Parguel et al. [42] on price dimension of luxury brand, explored the effect of price display in the premium luxury segment that has a positive influence on luxury perception and then reinforces the brand’s perceived quality, uniqueness or conspicuousness.
Koronaki et al. [34] suggested that in order to enhance and maintain the strong relationship with luxury brand customers in today’s shifting environment, arts-based initiatives can be designed and implemented as a relationship-strengthening tool for customers.
Electronic word-of-mouth marketing
Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea or other object [35].
As markets change, marketing theories must also change to accommodate them. Word-of-mouth marketing is part of a complex cultural process that nonetheless follows an ascertainable pattern; a networked coproduction of marketing messages and meanings; and specially, through newer forums of online community, such as social networking sites [36].
Word-of-mouth marketing is defined as the act of exchanging marketing information among consumers and plays an essential role in changing consumer attitudes and behavior toward products and services. The emergence of Internet-based media has facilitated the development of WOM online, that is, electronic word of mouth.
eWOM in social network sites occurs when consumers provide or search for informal product-related advice through the unique applications of these sites [6].
The perception of brands is influenced through value-enhancing potential of social media campaigns. This new communication channel favors relationship and community building, and it promotes active engagements of consumers. The direct involvement social media enables in respect to the creation of brand value gives consumers ever more power to influence brands [23].
Consumers are likely to seek out other’s opinion before making their own purchase decisions. So, online word of mouth has a significant influence on purchase behavior [5].
The above trends have severely diminished the usefulness and practicality of the traditional communications paradigm as a framework for developing integrated marketing communications (IMC) strategies. Social media is a hybrid element of the promotion mix because it combines characteristics of traditional IMC tools (companies talking to customers) with a highly magnified form of word of mouth (customers talking to one another) whereby marketing managers cannot control the content and frequency of such information [38].
In social network sites, opinion seekers may regard recommendations by friends or classmates as credible and reliable, and thus may rely on SNSs as a place to obtain information for their purchases. On the other hand, a socially extensive environment provides opinion leaders with greater opportunities to share product-related thoughts and opinions with other consumers [6].
And also, spreading positive word of mouth is to gain social approval or self-approval by demonstrating their superb purchase decisions. Word-of-mouth communication is an important facilitator of learning and can have a large impact on consumer decisions. Electronic communication, via online consumer review sites, has enabled an immediate information flow to a much wider audience as a single message can affect all site visitors [5].
So, electronic word-of-mouth marketing has a significant impact on all stages of the purchasing behavior of a customer, from pre-awareness to repurchase intent and demonstration of loyalty. eWOM behavior within social network sites may be initiated because of the users’ desire to establish and maintain social relationships within their personal networks. By sharing useful product information and experience, social network site users can help their social connections (e.g., friends) with purchase-related decisions [6]. On the whole, social media associate eWOM with online consumer-to-consumer interactions about brands [18].
New model for customer path to purchase
According to Kotler and Armstrong [35], the buyer decision-making process consists of five stages: need recognition, information search, evaluation of alternatives, purchase decision and post-purchase behavior that customer typically passes through them before he purchases. The most well-known and widely applied hierarchy of effects model is AIDA (Attention, Interest, Desire and Action), which consists of the purchase decision or attitude building phases, and another model introduced in the late nineteenth century includes seven phases [23]. Over time, the detail-based look at customer behavior in specialized Internet marketing world showed that the customer path to purchase has been changed a bit. For instance, the modern purchase funnel of Gibson [17], taking into account the emergence of Internet, describes the theoretical decision-making path from the moment of first contact with the brand to the ultimate goal of a purchase and includes post-purchase behavior, as well. The funnel explains what types of content are relevant for the potential customer at each phase [49].
Tendency toward a brand or purchase intent trigger is the moment at which the customer starts thinking about a purchase that could be triggered by an event, a change in circumstances, a pay rise, a need or even an advertising message (see Fig. 1). It will lead to purchase intention, or an eWOM marketing will be made by customer [23].
Some previous researches on electronic word-of-mouth marketing
De Bruyn and Lilien [9] developed a model to study the influence of unsolicited, electronic referrals within a multistage decision-making framework. They hypothesized and found supporting evidence that tie strength only facilitated awareness, perceptual affinity triggered recipients’ interest, and demographically dissimilar ties were more influential than demographically similar ones across different stages of the decision-making process. The study motivated by the challenges facing viral marketing tried to help disentangle the influence of WOM and the antecedents of such influence, at different stages of the decision-making process.
A highly cited article by Kozinets et al. [36] identified four distinct strategic patterns that communicators use and explained that word-of-mouth marketing operates through a complex process that transforms commercial information into cultural stories relevant to the members of particular communities. The theory draws managerial attention to the importance of working with a deep knowledge and awareness of the network coproduction of marketing messages and meanings through consumer-generated narratives.
In a study by Chu and Kim [6], a conceptual framework that identified social relationship factors and their relations with eWOM in SNSs was tested. The results confirmed that tie strength, trust, normative and informational influence are positively associated with users’ overall eWOM behavior on their favorite site. The article highlighted a notable difference between eWOM via social media and other online platforms such as product reviews and emails. The study suggested that product-focused eWOM in SNSs has important social implications for policy makers of social media regulation to focus on consumers who are more likely to trust their social contacts and thus engage in eWOM in SNSs.
In 2014, Moran and Muzellec [39] attempted to clarify the factors that affect the eWOM credibility. In this regard, they proposed a new framework consists of four components: community, competence, content and consensus. Thereby, they leveraged peer-to-peer users' communications in their interpersonal networks for the spreading of eWOM content. EWOM engagement on SNS was analyzed through the eWOM source and the eWOM message which impact the credibility of eWOM, according to their study.
Erkan and Evans [12] developed a conceptual model and highlighted the characteristics of eWOM information, such as quality and credibility of information. They predicted that the consumers who adopt eWOM information in social media are more likely to have purchase intentions and claimed that the influence of eWOM information on social media depends on the consumers’ behavior toward eWOM information, as well.
In another article, they proposed the question: Is eWOM between people who knows each other on social media or eWOM between anonymous people on other online platforms more influential on consumers’ online purchase intentions? They answered that anonymous reviews are more influential than friends’ recommendations due to information quantity, information readiness, detailed information and dedicated information of shopping Web sites in terms of the impact of eWOM [13].
Social network sites
As defined by Kaplan and Haenlein [31], social media are “a group of internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user generated content” [6].
Social media is the next generation of business engagement and plays a significant role in marketing. Acting in the consideration phase, social media is facilitator or disruptor of a potential purchase. Engagement, in a social business sense, means the customers are willing to take their time and energy to participate in a conversation process in the context of the social Web. The social applications connect consumers and employees with the business as a whole and facilitate the process of customer engagement [14].
Brands strive for consumer engagement on SNS in the hope of leveraging the friend connections of their followers [39]. Engagement as a business activity is conversion of the energy of customer or stakeholder passion into energy that produces a business benefit. This conversion of passion into a business benefit might occur between customers—for example, when a customer who becomes an evangelist emerges as a true advocate for your brand, product or service [14].
In the traditional communications paradigm, the elements of the promotional mix are coordinated to develop an IMC strategy, and the content, frequency, timing and medium of communications are dictated by the organization in collaboration with its paid agents [38]. The characteristics of the Internet and e-retail are: a global reach; a pull marketing approach where customers are drawn to information and purchases, rather than a push medium where customers are driven by advertising; a lack of physical contact with the goods and human contact with the sellers; a low switching cost as it takes only one click to switch between Web sites; fast and convenient; more product variety and access to viewing them; availability and accessibility irrespective of time and location; less powerful sales as it is easy to say no to a computer; and a universal appeal and uniform information [40]. If the pull marketing strategy is effective, consumers will then demand the brand from retailers [35]; so, it often creates loyal customers or followers. Social networking sites (SNSs) offer brands the ability to spread positive electronic word of mouth (eWOM) for the purposes of building awareness and acquiring new customers [39].
According to Kotler’s marketing management principles, to build an effective communication, formulating each marketing message requires solving four problems: what to say (message content), how to say it logically (massage structure), how to say it imaginatively (message format) and who should say it (message source). The message content should get attention in three types of appeals: rational, emotional and moral. The massage format should be eye-catching, distinctive style in size, color and shape and movement, and body language, facial expressions, gestures, dress, posture and hairstyles of the presenter. For example, color alone can enhance message recognition for a brand [35]. As a marketing tool, color attracts consumers and can shape their perceptions. Through color, a brand can establish an effective visual identity, form strong relationships with a target market and position itself among competitors in the marketplace [37].
With regard to many-to-many communication on social media platforms that is characterized with exponential growth of the WOM volume, engagement level will be measured by: indicating interest in an existing post by pressing the “like” button or sharing the post on their profile wall or commenting on the existing post shared by the moderator or even, generating/posting content on the wall. These actions represent a form of WOM communication [8].
Some previous researches on marketing through social network sites
Mangold and Faulds [38] illustrated the impact of the interactions among consumers in the social media space on the development and execution of IMC strategies and emphasized to include social media in the promotion mix.
Hennig-Thurau et al. [22] tried to answer this question “why are consumers attracted to the new media and how do they influence consumers’ affect and behavior?”. They described characteristics of new media and discussed how they affect consumer behavior, the successful management of customer interactions and measuring customers’ activities and relationship outcomes.
De Vries et al. [10] indicated that the brand post popularity drivers have strong relationship with the determinants used in advertising of a brand fan page. Hutter et al. [23] analyzed the influence of brands’ social media activities and participants’ social media involvement on the purchase decision-making process of consumers. Their findings demonstrated that engagement with a social network site fan page has positive effects on consumers’ brand awareness, eWOM activities and purchase intention.
Soares and Pinho [46] analyzed perceived enjoyment as a predicting variable of social influence and advertising variables. The perceived enjoyment is associated with the use of online social networks that the users as members of large communities adopt group norms and develop common intentions toward advertising.
Cvijikj and Michahelles [8] measured the engagement level through number of likes over the content created by the company, number of comments and shares and also interaction duration. Their results indicated that different brand communities might have different interests and motivations for participation, resulting in different responses to characteristics of the content created by the company on brand pages, in their case, on Facebook.
At the end of literature review, it is worth mentioning the researches were done in line with issue of “social network sites marketing on luxury brands”: Annie Jin [1] examined the role of consumers’ hedonic motivations behind a choice behavior and their perceptions of value-expressive and social-adjustive functions of luxury brands. Their study tested the marketing potential of social media for luxury brand management. The results indicated that consumers’ satisfaction with a luxury brand’s social media interface is a positive predictor of favorable attitude toward the luxury brand.
Following the former researches of Kim and Ko about the impacts of social media marketing of luxury fashion brand on customer relationship and purchase intention, Kim and Ko [32] found that social media marketing activities of luxury brands comprise five constructs: entertainment, interaction, trendiness, customization and word of mouth; as value equity and brand equity affect purchase intention and social media marketing activities influence these factors, taking social media marketing into account can be a possible solution to develop relationship equity and then customer equity.
Using description of social media marketing efforts of luxury brands from five perspectives by Kim and Ko [32], Godey et al. [18] contributed that the investments in brand equity (brand awareness and brand image) whether online or off-line would strengthen social media marketing efforts on customer responses and finally convince him to pay a premium price.
The last relevant article belongs to Pentina, Guilloux and Micu [43] that analyzed social media engagement behavior of luxury consumers in 11 discrete behaviors to help luxury social media managers in monitoring social media for optimal social media marketing strategies.
